logly,Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥718M
• Operating Income: ¥-31M
• Net Income: ¥-75M
• EPS: ¥-19.71

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Full Year Forecast

Disclaimer

This data was automatically extracted from XBRL files. Please refer to the original disclosure documents for accuracy.

AI Financial Analysis

Executive Summary

Verdict: FY2026 Q2 was weak with a revenue decline and an operating loss, highlighting pressure from soft topline and elevated SG&A relative to gross profit. Revenue fell to 7.18 (−7.1% YoY), gross profit was 1.65, and SG&A of 1.96 resulted in operating income of −0.31. Ordinary income printed at −0.35 with non-operating net expense (0.04 income vs 0.08 expense) slightly widening the loss. Net income was −0.75 (EPS −19.71 yen), and total comprehensive income matched net loss at −0.75. Gross margin stood at 23.0%, and the operating margin was approximately −4.3%; YoY basis-point comparisons are not available due to missing prior-period margin detail. The DuPont ROE came in at −18.2% driven by a negative net margin (−10.4%), modest asset turnover (0.803x), and financial leverage of 2.18x. Operating cash flow was −0.97, which is worse than net loss; the OCF/NI ratio of 1.30x is not economically meaningful with both figures negative, and the key takeaway is ongoing cash burn. Liquidity remains adequate with a current ratio of 152.8% and cash/deposits of 5.47 comfortably exceeding short-term borrowings of 1.00. Debt-to-equity is 1.17x, but interest coverage is deeply negative (−18.67x) due to operating losses, triggering a debt service quality alert. Balance sheet shows accumulated deficits (retained earnings −6.03) offset by large paid-in capital (capital stock + capital surplus), supporting equity of 4.11 (BVPS ~108 yen). Capex was minimal (−0.01), suggesting flexibility to preserve cash, but investing cash flow details were not disclosed. With topline softness and SG&A above gross profit, near-term profitability hinges on revenue recovery and/or cost rationalization. Forward-looking, management will likely need to prioritize restoring gross margin and scaling revenue while aligning SG&A, as liquidity can buffer near-term losses but negative OCF is not sustainable indefinitely. Data gaps (e.g., SG&A breakdown, D&A, investing CF, extraordinary items) limit the precision of drivers and comparability.

Profitability Analysis

ROE decomposition: ROE (−18.2%) = Net profit margin (−10.4%) × Asset turnover (0.803x) × Financial leverage (2.18x). The most material negative component is net profit margin, as the company posted an operating loss with SG&A (1.96) exceeding gross profit (1.65). Business driver: revenue contraction (−7.1% YoY) combined with a low gross margin (23.0%) left insufficient contribution to cover fixed costs, pushing operating income negative; non-operating net expense further pressured ordinary income. Sustainability: absent clear one-off items, the loss appears driven by core operations; improvement would require revenue re-acceleration and/or cost structure adjustments. Asset turnover at 0.803x reflects modest efficiency for a light-asset ad-tech model; without YoY comparison, trend direction is unclear. Financial leverage at 2.18x is moderate and not the main ROE driver; however, negative earnings magnify the ROE decline. Concerning trends: SG&A outpaced gross profit (SG&A / gross profit ~119%), indicating negative operating leverage; revenue decline alongside cost stickiness is a risk. Reported EBITDA margin is −4.3% (note: D&A is undisclosed and likely non-zero), reinforcing weak margin quality.

Growth Assessment

Revenue declined 7.1% YoY to 7.18, confirming demand softness or pricing pressure in the period. Gross margin at 23.0% suggests limited take-rate or higher traffic acquisition cost; without prior-period margin, we cannot quantify bps compression/expansion. Profit quality is weak: operating loss (−0.31) and ordinary loss (−0.35) indicate core earnings pressure with limited support from non-operating income. Non-operating income is immaterial (0.04) and cannot offset operating shortfalls; interest expense of 0.02 adds drag. Outlook hinges on revenue stabilization and cost realignment; minimal capex implies the model is not capex-constrained, so operating actions (pricing, mix, client acquisition, traffic cost optimization) are the levers. Given negative OCF and accumulated deficits, execution speed on returning to break-even is critical. Data limitations (no segment detail, no SG&A breakdown, no D&A) constrain identification of specific growth drivers.

Financial Health

Liquidity: Current ratio 152.8% and quick ratio 152.8% are healthy (>1.5 threshold). Cash and deposits of 5.47 exceed short-term loans (1.00) and cover accounts payable (1.18), limiting near-term liquidity risk. Solvency: Debt-to-equity 1.17x is moderate (<1.5 benchmark), with total liabilities 4.82 vs equity 4.11. No explicit warning triggers: Current ratio is not <1.0 and D/E is not >2.0. Maturity mismatch: Current assets (7.35) exceed current liabilities (4.81), and cash coverage of near-term obligations is ample, suggesting low refinancing pressure in the short term. Interest-bearing debt details are partially undisclosed, but disclosed short-term and long-term loans total 1.13; with cash > debt, net cash position appears positive. Off-balance-sheet obligations: none reported in the data provided. Equity quality: retained earnings are negative (−6.03), indicating cumulative losses, but large paid-in capital supports book equity (owners' equity 4.03).

Cash Flow Quality

OCF was −0.97 vs net loss of −0.75; the negative gap implies cash burn exceeded accounting loss, likely due to working capital outflow or non-cash items being limited. The OCF/NI ratio of 1.30x is not a quality signal when both are negative; the core message is that operations consumed cash. Free cash flow cannot be fully assessed due to missing investing CF; however, capex was minimal (−0.01), so FCF likely approximated OCF barring sizable investment securities flows or acquisitions. Sustainability: continued negative OCF would erode the cash balance over time, but current cash (5.47) provides a buffer. Working capital: Accounts receivable is 1.24 and accounts payable 1.18, indicating a relatively balanced trade working capital; without cash flow detail, we cannot confirm changes or potential period-end working capital management.

Dividend Sustainability

Dividends are unreported for the period; payout ratios are not calculable. With net loss (−0.75), negative retained earnings (−6.03), and negative OCF (−0.97), internal capacity to fund dividends is limited. While cash on hand is solid, deploying it for payouts would not be sustainable absent a return to positive FCF. Policy outlook cannot be inferred from the provided data.

Risk Assessment

Business Risks:

• Revenue contraction (−7.1% YoY) indicating demand or pricing pressure in the ad-tech market.
• Low gross margin (23.0%) leaves limited cushion to cover fixed costs; SG&A exceeds gross profit.
• Dependence on digital ad platforms/traffic costs; potential adverse changes in algorithms or inventory pricing.
• Regulatory/privacy changes (e.g., cookie deprecation) that could impair targeting effectiveness and CPMs.
• Customer concentration risk typical in ad-tech (not disclosed here).

Financial Risks:

• Negative operating cash flow (−0.97) alongside net loss (−0.75) increases cash burn risk.
• Interest coverage is deeply negative (−18.67x) due to operating losses, raising debt service quality concerns, despite strong cash.
• Accumulated deficits (retained earnings −6.03) constrain financial flexibility and capital policy.
• Potential covenant or refinancing risk if losses persist (loan terms not disclosed).

Key Concerns:

• SG&A/gross profit ratio ~119% indicates structural profit shortfall.
• Ordinary loss (−0.35) and net loss (−0.75) with limited non-operating offsets.
• Data gaps (no SG&A breakdown, D&A, investing CF), obscuring cost structure and investment needs.
• Effective tax expense despite loss (tax 0.07; effective tax rate −9.6%) reduces cash available.

Investment Implications

Key Takeaways:

• Topline declined 7.1% YoY to 7.18 with gross margin at 23.0%, signaling soft monetization.
• Operating loss (−0.31) driven by SG&A above gross profit; ordinary and net losses persisted.
• Liquidity is adequate (current ratio 152.8%, cash 5.47 > ST loans 1.00), mitigating near-term stress.
• Leverage moderate (D/E 1.17x) but interest coverage is negative due to losses (alert).
• OCF negative (−0.97) and likely approximates FCF given low capex, implying ongoing cash burn.
• Equity remains supported by paid-in capital, but retained earnings are negative, limiting capital policy flexibility.

Metrics to Watch:

• Quarterly revenue growth and advertiser retention/new client adds.
• Gross margin/traffic acquisition cost trends and take-rate improvements.
• SG&A ratio to revenue and timing of cost realignment to reach break-even.
• Operating cash flow trajectory and cash burn rate relative to cash on hand.
• Interest coverage recovery and any debt covenant disclosures.
• Any disclosures on product mix, platform dependencies, and privacy/ID solutions impact.

Relative Positioning: Versus TSE Growth ad-tech peers, Logly shows weaker current profitability (negative operating and ordinary income) and negative OCF, but maintains a comparatively strong cash position relative to debt, providing time to execute on margin and growth recovery.

Disclaimer

This analysis was auto-generated by AI. Please note the following:

• No Guarantee of Accuracy: The accuracy and completeness of this analysis are not guaranteed. For accurate financial data, please refer to the original disclosure documents published on TDnet or other official sources
• Not Investment Advice: This analysis is for general informational purposes only and does not constitute investment advice under applicable securities laws. It is not a recommendation to buy or sell any specific securities
• At Your Own Risk: Investment decisions should be made at your own discretion and risk. We assume no liability for any losses incurred based on this analysis